REAL ESTATE: WHAT IS CROWDFUNDING?

REAL ESTATE: WHAT IS CROWDFUNDING?

Real estate has a long history of profitability that comes with an extensive list of successful investors. All throughout the years, there have been numerous concepts that have been brought up that could give a reliable profit for investors. One such concept that has been gaining a lot of popularity is real estate crowdfunding. Unique Wealth Education offers to help out investors new to the field to eventually gain leverage over the real estate business. Here are a few takeaways we can share about real estate crowdfunding.

A brief introduction to crowdfunding

The idea behind crowdfunding is coming up with funds for a project through the use of different social media outlets to reach an audience of potential investors. The popularity of this concept is due to the fact that many people are willing to invest a small amount of money which eventually raises large sums of cash rather quickly. 

In the past, the rules of real estate crowdfunding were strict where only accredited investors were allowed to invest. This wouldn’t have been a good option for those who wanted to invest with a small capital to start with since only investors who were worth a large net worth or at least an annual income of $200,000 were qualified. 

As time passed by, the rules became more lenient which allowed new investors to give crowdfunding a try. Those who had an annual income of $100,000 can invest up to 10% of their income, while those who make less than $100,000 are limited to only 5%. This opened up opportunities for a lot of investors and therefore have seen it as a good means of investment.

Is it a worthy investment?

Real estate investment is inherently risky. Whatever strategies you choose to start with should be approached with caution. Like what we’ve mentioned, crowdfunding is a relatively new concept. Despite that, it has proven to benefit fresh newbies and seasoned pros in real estate. Here are a few of those benefits that can help you change your mind

1. Access to Capital

How can it benefit you?

Gain access to capital through the use of an online platform with a large investor network

Crowdfunding is a great way to have easy access to credit and capital without the hassle of trying to get a loan. Investors can benefit by keeping their personal credit free while keeping their credit scores in tact. Small business owners are able to get their companies up and running quickly. This allows them to eventually help investors secure funding for deal when options through traditional means are limited or unavailable.

2. Can be used as a marketing tool

How can it benefit you?

Use it as a means to promote your business to a large pool of investors in the market

The basis of crowdfunding is through the use of social media platforms. By promoting fundraising campaigns through social media and directly on crowdfunding platforms, investors are expected to reach a wide real estate network. The main goal here is to show credibility and professionalism through your website. Allow interested investors to view your past and current projects and add in your business’ mission and goals.

3. Build Investor Loyalty

How can it benefit you?

Consistency with positive results builds a good appeal with fellow investors

Through effective campaigning of your real estate business, you potentially attract investors to give you support. With secured funding, your contributors become invested in your success and do what they can to help you succeed. More business partners and direct referrals come flooding in as long as you maintain consistency with your results.

4. Crowdfunding platforms are user-friendly

How can it benefit you?

Save time and money with easy to use platforms

Most of the real estate crowdfunding platforms can showcase your campaigns in a visually appealing manner. They offer a variety of real estate opportunities to choose from. This allows you to expand your audience with only the least amount of effort. It also gives you a good opportunity to diversify your real estate investment portfolio. 

5. Get valuable feedback

How can it benefit you?

Fellow investors who are masters in the real estate craft can give valuable input

Your large online community of investors gain access to a space open for suggestions. Experienced real estate investors can easily pinpoint any pitfalls that you may encounter. Criticism whether good or bad should be seen as something constructive and be used to identify and fix your real estate business flaws. Most users who utilize crowdfunding forget to respond to any suggestions given by their community. Replying to suggestions is an integral part of building a personalized connection with your contacts.

Things to consider before starting

Real estate crowdfunding is not immune to the ups and downs of the real estate market and its different trends. This involves a high risk high reward type of approach so if taken lightly, you may end up regretting your financial choices in the end. Take note that although you have a wide area to advertise your real estate, this doesn’t guarantee that it would be the best type of investment. 

What we’re trying to do is not to discourage you but to help you carefully plan your approach when utilizing crowdfunding as your starting point in your real estate business. Research and having a positive outlook are the tools that you need to keep moving forward with your investments. If you still want to test out the waters of real estate crowdfunding, Unique Wealth Education will be with you all the way and guide you through. We have monthly meetups every first Thursday of each month for new and seasoned investors to share everything there is to know about the real estate business. Call us at (734)224-5454 or email us at info@getuwe.com to know more.

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